The Influence Of Monetary Policy Intermediate Target On The Liquidity Of China's Stock Market

With the prosperity of China's economy,the stock market has been increasing,and the stock market has become an important investment channel for investors.In recent years,the instability of the stock market has caused heavy losses to investors and hindered the development of the real economy,which has attracted the attention of monetary authorities.This paper states the transmission mechanism of monetary policy,and analyzes the interaction between monetary policy intermediate target and stock market liquidity.Then builds the stock market liquidity index,chooses the seven-day china interbank offered rate,the RMB nominal effective exchange rate index between January 1998 and September 1998.Take December 2005 as the segmentation point,uses DAG-SVAR model study the dynamic relationship between the intermediary target of different monetary policy and the liquidity of stock market.The empirical results show that the different level of money supply,interest rate and exchange rate has certain influence on stock market liquidity,but the direction and the degree of their impact are uncertain in different period of time,and the short-term effect is obvious.On the degree of influence,interest rate has the strongest influence,the exchange rate is second,the M1 is the weakest.On the impact cycle,interest rates are the most persistent and M0 is the shortest.But in different periods,the reverse effect of stock market liquidity on intermediate targets of monetary policy is very small.